LivaNova Raises 2026 Outlook After 10% Q3 Growth

LivaNova PLC (NASDAQ: LIVN) raised its full-year 2026 revenue and adjusted earnings guidance after third-quarter sales increased across both Cardiopulmonary and Neuromodulation, supported by healthy demand, higher volumes and favorable realized pricing.

The medical technology company now expects 2026 revenue growth of 9% to 10% on a constant-currency basis, up from its previous 8% to 9% range. It also increased adjusted diluted earnings-per-share guidance to $4.40 to $4.50 from $4.30 to $4.40. Foreign currency is expected to provide a tailwind of about 1% based on current exchange rates.

LivaNova retained its adjusted operating margin forecast of 20% to 21% and adjusted free cash flow guidance of $140 million to $160 million.

Revenue and adjusted profit rise

Third-quarter net revenue reached $393.1 million, up 9.9% on a reported basis and 10% in constant currency from $357.8 million a year earlier. The company said foreign-exchange movements had a negligible year-over-year effect during the quarter.

Adjusted diluted EPS increased 10.6% to $1.23 from $1.11, while adjusted operating margin expanded to 23.5% from 22.5%. Adjusted segment income rose to $118.6 million from $101.8 million, lifting total adjusted segment margin to 30.3% from 28.9%.

On a GAAP basis, net income increased to $34.3 million from $26.8 million. GAAP diluted EPS was $0.11, compared with $0.49 a year earlier, reflecting the diluted earnings calculation and several items excluded from adjusted results. Third-quarter adjustments included $39.8 million of certain legal and regulatory costs, primarily associated with the 3T Heater-Cooler litigation provision and related defense expenses.

Adjusted free cash flow was $55.8 million, down from $62 million in the prior-year quarter. LivaNova attributed the quarterly cash generation to improving profitability, partly offset by higher planned capital expenditure and working-capital investment. Purchases of property, plant and equipment increased to $30.8 million from $22.9 million.

For the 12 months ended Sept. 30, adjusted free cash flow fell to $158.5 million from $192.1 million, while adjusted free cash flow conversion declined to 65% from 91%.

Cardiopulmonary and Neuromodulation deliver double-digit growth

Cardiopulmonary revenue rose 10.9% in constant currency to $225.3 million, with double-digit growth in Europe and the United States. Consumables revenue grew at a low-double-digit rate, led by oxygenators and perfusion tubing sets. Heart-lung machine revenue also increased at a low-double-digit pace, driven by more Essenz Perfusion System placements and sustained favorable price premiums.

Adjusted Cardiopulmonary segment income increased to $48.8 million from $39.2 million, and the segment’s adjusted margin expanded to 21.6% from 19.3%.

Neuromodulation revenue increased 11.2% in constant currency to $166.1 million, with double-digit growth in every region as higher volume and favorable realized pricing supported results. Epilepsy revenue grew 10.9%, including 10% growth in the U.S. and a combined 14.2% increase across Europe and the rest of the world.

Adjusted Neuromodulation segment income rose to $69.9 million from $62.7 million, while its adjusted margin edged up to 42.1% from 41.9%.

Capacity expansion and product development remain priorities

LivaNova achieved operational production on its previously announced new oxygenator manufacturing line, a step intended to expand capacity in response to customer demand. The company expects full-year Cardiopulmonary revenue growth of 10.5% to 11.5%, compared with its previous 9.5% to 10.5% forecast. Expected Epilepsy growth was increased to 8% to 9% from 7% to 8%.

The company plans about $135 million of capital spending in 2026 to support innovation, capacity growth and information technology infrastructure. Its adjusted free cash flow outlook incorporates investments in Cardiopulmonary capacity, innovation and IT.

LivaNova is also increasing investment in obstructive sleep apnea product development as it works on its next-generation proximal hypoglossal nerve stimulation platform. In October, the American Medical Association’s CPT Editorial Panel announced new Category I codes that include LivaNova’s pHGNS therapy for moderate to severe obstructive sleep apnea, with an expected effective date of Jan. 1, 2028.

In epilepsy, the company announced publication of the full 36-month results from the CORE-VNS observational study. The study reported a 76% median reduction in seizure frequency, durable clinical benefit and improvements in rescue medication use, healthcare resource utilization and quality of life. LivaNova also continues to pursue Centers for Medicare and Medicaid Services coverage for VNS Therapy in difficult-to-treat depression, for which it expects approximately $10 million of 2026 revenue.

The outlook remains subject to risks including global economic and trade volatility, tariffs, supply-chain pressure, cybersecurity incidents, regulatory and reimbursement decisions, clinical outcomes, product quality issues and litigation. LivaNova specifically identified the 3T Heater-Cooler litigation and environmental matters involving Saluggia and SNIA among its legal and regulatory uncertainties.